Policyholder Services

What coverage does OMIC provide to physicians who share an office but aren’t in a formal partnership or corporation?

Partnerships and corporations may purchase separate entity coverage, which includes both defense and indemnity coverage. While separate entity coverage is not available to “apparent partnerships,” OMIC does extend defense coverage, with a reservation of rights, for claims or suits against an insured physician for his/her vicarious liability arising solely as a result of the insured’s alleged status as an apparent partner. (Indemnity and defense coverage are extended to the insured with respect to his/her own acts or omissions in the treatment of a patient.)

An “apparent partnership” is defined as an association between two or more physicians in which the physicians, by way of participating in a profit-sharing plan, sharing a common business name, using common billing, using common letterhead, referring to each other as partners, advertising together, and/or seeing each other’s patients on a regular basis, appear to the public to be in partnership even though they have not legally formed a partnership or corporation and are not employer and employee. Because of their formal business arrangement, physicians who contract with another ophthalmologist are generally not deemed “apparent partners.” Similarly, physicians who simply share office space and/or personnel but otherwise keep their practices separate generally are not regarded as “apparent partners.” Physicians who practice in “apparent partnerships” may be held liable for the acts or omissions of their associate in the same way that physicians in corporations or legal partnerships can be liable for the acts or omissions of the other shareholders or partners. Therefore, it is very important that physicians exercise caution when entering into office-sharing arrangements to ensure they are not unnecessarily increasing their liability exposure or exposing themselves to an uninsured risk.

To help physicians determine whether their practice could be construed as an apparent partnership and to provide guidance on ways to minimize the risk of being held liable as an “apparent partner,” OMIC has developed a Guide to Apparent Partnership.

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OMIC was founded by members of the American Academy of Ophthalmology nearly a quarter century ago and is the only carrier sponsored and endorsed by AAO. OMIC is also endorsed by 54 other ophthalmic societies. The OMIC partnerships with state and subspecialty societies qualifies their members for an exclusive 10% premium credit. Contact your state society for details.